Profit grew just 7.5 percent in the July 2024 quarter even as revenues climbed nearly 19 percent, to $5.46 billion from $5.07 billion in 2023 at Scotia Group, increased provisions for loan losses and lower gains from foreign exchange trading helped to reduce the quarterly profit. For the nine months to July, profit popped 11.43 percent higher to $14 billion from $12.56 billion in 2023.
For the July 2024 quarter, other comprehensive income pushed total profit to $6.4 billion for the latest quarter versus $5.5 billion in 2023 and to $9.15 billion for the nine months after accounting for negative other comprehensive income of $4.85 billion and $9.17 billion in 2023 after negative other comprehensive income of $3.4 billion.
Total revenues climbed 18.7 percent for the quarter, to $17.3 billion from $14.49 billion and at a faster pace than the 15.65 percent increase for the year to date to $50.7 billion from $43.8 billion in 2024.
Net interest income rose a solid 18.5 percent to $11.85 billion in the third quarter of this year, from the same quarter in the prior year of $10 billion. For the nine months, Net interest income jumped 18.3 percent to $34.2 billion from $28.9 billion in 2023. Net fee and commission income inched from $1.65 billion in 2023 to $1.68 billion in the July 2024 quarter and from $4.94 billion in the nine months to July 2023 to $5.11 billion in the current year.
Net foreign exchange trading gains amounted to just $2.28 million in the July 2024 quarter, down from $2.47 billion in the previous year. The nine months came in at $6.84 million compared with $6.49 billion. Insurance activities delivered profits of $602 million for the latest quarter, up from $478 million in the previous year. For the nine months, it moved to $1.66 billion from $1.5 billion in the comparative period in 2023.
Scotia Group increased loan loss provision by 344% in July quarter.
Credit impairment losses jumped sharply to $858 million in the July quarter, from $480 million last year, but less than the $1 billion in the April quarter and $2.89 billion in the nine months, compared with $1.66 billion in 2023.
The various segments had mixed results for the nine months to July, with the Treasury banking generating a robust 29 percent increased revenues of $11.77 billion, up from $9.1 billion in 2023, with net results of $2.9 billion in 2024 compared with $2.64 billion in the prior year’s nine months to July. Retail Banking enjoyed a 12 percent increase in revenues to third parties of $16.8 billion contributing segment results of $2.64 billion, down from $3.4 billion from revenues of $15 billion in 2023. Corporate and Commercial banking had an 11.6 percent growth in revenues to $11.72 billion from $10.6 billion in 2023 with net segment results surging 25 percent to $10.5 billion in 2024 from $8 billion in 2023.
Investment Management had a moderate decline in revenues to $2.3 billion from $2.38 in 2023 and net results of $1.25 billion in 2024, down from $1.3 billion in 2023. Insurance Services delivered revenues of $3.25 billion in 2024, net results dropped to $3.2 billion compared with revenues of $3.48 billion in 2023 with net segment results of $3.1 billion.
Staff cost rose 12.5 percent to $2.97 billion from $2.64 billion and grew 12.8 percent to $8.88 billion for the nine months from $7.87 billion. Other operating expenses rose moderately to $3.4 billion in the quarter from $3.3 billion and inched up in the nine months from 9.7 billion to $10 billion. Total operating expenses increased by 11 percent to $7 billion from $6.39 billion for the latest quarter and 8.3 percent to $22.56 billion from $20.82 billion for the nine months to July.
Audrey Tugwell Henry Scotia group’s CEO
Loans, the most important contributor to income, grew 13.54 percent from $256.85 billion in July 2023 to $291.64 billion in 2024. The growth rate in the July quarter is consistent with that for the full year and should pick up with rates on Bank of Jamaica CDs now at the 7 percent level and well off for the peak earlier this year of nearly 12 percent. Investment securities moved by 12.7 percent from $157 billion to $177 billion this year. Customer deposits grew 6.4 percent to $472 billion. Shareholders’ equity ended the period at $132 billion, up from $113 billion at the end of July 2023, partially aided by reduced losses on investment securities from $3.2 billion to $687 million.
Earnings per share for the quarter were $1.75 and $4.50 for the year to date. IC Insider.com computation projects earnings of $6.50 per share for the fiscal year ending October 2024, with a PE of 6.6 times the current year’s earnings based on the last traded price of $43 on the Jamaica Stock Exchange.
The Group will be paying a dividend of 45 cents per share in October, an increase from 40 cents since last year, October and brings the total payment to $1.65 versus $1.45 for the similar period to October last year, for an increase of 13.8 percent.
Scotia Group is graded ICInsider.com BUY RATED with the stock currently severely undervalued, with good growth prospects going forward that will deliver an increasing flow of dividend income.
